I am often perplexed by niche recruitment agency owners who claim their main competitors are the large global companies. As a general rule, large global companies will be having a different conversation at a different level within prospective companies about a different set of products and solutions.
Niche agencies will not survive in the future if they attempt to offer the same products and solutions at the same price points as the very large companies. What they can offer is specialisation, flexibility, speed to market (nimbleness), creative partnerships, alternate pricing structures, and very personalised service.
Niche companies can also rightsize their service offerings to clients, providing a service with the right level of complexity and process to match the client requirements. Larger companies often don't scale down very well; smaller companies usually don't scale up. Today and in the future smaller companies cannot afford to waste scarce resources targeting business that is not in their sweet spot.
In addition to this target focus, the two big issues for niche companies in the future revolve around technology and talent.
How do smaller companies maintain the investment in technology that improves efficiencies and enables communication channels? Fortunately the technology industry is providing solutions and environments like cloud computing allow smaller companies to utilise sophisticated solutions on a pay for usage basis.
In recent years access to job boards and social media have proven that technology solutions quickly become ubiquitous across the industry but owners and managers still need to push their organisations forward. Many agencies are very poor users of technology and don't seek continuous improvement from technology for their processes and procedures, marketing, sales and stakeholder communication.
Internal efficiency aside, the reason this is important is because you can't let your clients and candidates expectations get too far in front of your service offerings or they will simply go somewhere else.
Last month's Recruitment Extra interview with David Arkless of Manpower was eye-opening. Its an old phrase “ Its a war for talent but its back and this time it isn't going away. It's here and now and the companies that don't get involved will fail".
There is a real challenge for niche companies to remain relevant when the talent their clients demand just isn't available in the local market. Rotating existing talent isn't enough. There is a need to get involved in the human capital supply chain participate in creating new talent, and participate in identifying and shifting global talent.
Global sourcing is already a sophisticated service offering for many ANZ recruitment companies. Sectors such as medical, nursing, engineering and specialised mining, oil and gas are global industries where talent moves from project to project on a global basis. Niche companies often partner or outsource functions to enable them to gain the capacity and intellectual property required to compete.
A more complex issue is to participate in generating new talent on behalf of your clients. Again this is already part of the service offering for some ANZ recruitment companies, but more needs to be done. The integration of education, training, talent management, recruitment services and corporate HR planning will continue.
Your organisation needs to keep up.
The Recruitment Industry is already undergoing significant changes and I have no doubt that within 10 years, many of today's low tech traditional style recruitment firms will have fallen well off the radar. They will have been replaced by new, differently skilled and structured firms that excel in a new technology era. For those firms that are really focused on productivity costs its likely that specific elements of the placement process will be conducted either remotely or offshored. Cloud computing will offer cost effective cutting edge technology solutions to all which will greatly assist in intelligent screening and skills assessments. Viral advertising and online games will be the medium which puts the pace setters at the head of the pack.
The global war for talent will have become even more intense in a world that already expects services to be instantly available at their fingertips through twitter, Linkedin, sms, mms, Facebook, ebay etc. Further huge advancements in mobile technology, broadband speeds and web based applications can be expected to change the speed and manner in the way we work.
To thrive the small boutique firms will have to ensure that they really are ,an inch wide and mile deep in their chosen mix of associated and sustainable markets. They will be masters of digital and physical communication and will be able to interact quickly and cost effectively with the right candidate and employer networks.
The winners will be those that partner with their clients to build and present to a selected market an engaging online and physical recruitment process and experience. For many of the Executive, Professional and Technical sectors the majority of placements made will be sourced through online referrals, networking and search. Proactive sourcing of candidates will be the norm and there may be little reliance on Job Boards as we know them today.
The smart recruitment companies will acknowledge that in overcoming part of the supply and demand issue caused through skill shortages and aging populations, they will have to get involved and invest in training and education. Skills training will become another core activity for the top performing companies.
It will come as no surprise to me if Linkedin is the world's number 1 profit earner from the global recruitment market, but there will still be plenty of space for the smaller tech savvy niche players who offer a great service.